NEIMAN-MARCUS CO. v. LAIT

August 19, 1952

NEIMAN-MARCUS CO. et al
v.
LAIT et al.

The opinion of the court was delivered by: MURPHY

These are motions by defendants Lait and Mortimer to dismiss a complaint purporting to allege a cause of action in libel on the ground that it fails to state a claim upon which relief can be granted, and to strike certain paragraphs therefrom. The defendants, at this stage of the proceedings, are authors of a certain book, the complaint having been dismissed on motion by plaintiffs with respect to the printing and publishing defendants.

The complaint alleges that certain matter, set forth in the margin,
*fn1"
was published of and concerning the plaintiffs and each of them, and is libelous. Plaintffs consist of a corporation, Neiman-Marcus Company, named in the book, and three groups of its individual employees, not so named but allegedly referred to in the book, listed in the complaint as follows:

(1) Nine individuals 'each of whom is a model employed by Neiman-Marcus for the purpose of modeling or displaying clothes to prospective customers' and who 'constitute the entire group of such models regularly employed by Neiman-Marcus' (Complaint, par. 3, 16):

(2) Fifteen individuals 'each of whom is a salesman employed for the purpose of serving prospective customers in the Neiman-Marcus men's store' and each of whom brings this suit 'in his own behalf and, pursuant to Rule 23(a)(3) of the Federal Rules of Civil Procedure (28 U.S.C.), on behalf of all other salesmen employed by Neiman-Marcus in its men's store who care to join and participate in this action' (Complaint, par. 4, 12); and

(3) Thirty individuals, 'each of whom is a saleswoman employed by Neiman-Marcus for the purpose of serving customers in the various departments of the store' and each of whom, as in the case of the fifteen salesmen, bring this action on behalf of all other saleswomen (Complaint, par. 5, 13).

The complaint does not allege the number of models who were employed by the corporate plaintiff, other than those 'who constitute the entire group of such models regularly employed' nor the number of its salesmen or saleswomen, either regularly or otherwise employed, but states that the corporate plaintiff 'employs more than 1200 people' (Complaint, par. 41).

All of the plaintiffs are alleged to be citizens of Texas and the defendants, citizens of New York. The matter in controversy is alleged to exceed for each of the plaintiffs, exclusive of interest and costs, the sum of $ 3,000. The corporate plaintiff seeks $ 2,000,000 and the other ones $ 100,000 each, in compensatory and punitive damages, together with costs.

The complaint, filed in this Court on April 14, 1952, alleges that the book in question 'was offered for sale by defendants Crown Publishers, Inc. throughout the United States commencing on or about March 4, 1952' (Complaint, par. 19).

Two principal questions are presented by these motions, whether or not: (I) the individual plaintiffs have failed to state a claim upon which relief can be granted; and (II) the corporate plaintiff has so failed. We shall consider these questions in that order.

I.

The first question turns upon whether the individual plaintiffs are ascertainable or capable of identification from the words complained of so as to state a claim upon which relief can be granted. At the outset a preliminary question of choice of governing law is posed, provided (1) this question of identifiable reference to the plaintiffs may properly be deemed one of the substantive law of libel and not a procedural one within the province of Federal Court law; (2) the controversy is significantly related to more than a single jurisdiction; and (3) resolution of the question on its merits will vary according to which related jurisdiction supplies the governing internal substantive law.

The nature of the question presented and the allegation in the complaint that 'the book was offered for sale * * * throughout the United States', make clear that the question is one of substantive law and relates to more than a single jurisdiction. It also appears that determination of this question may vary according to which jurisdiction is selected to supply governing law. A libellous imputation directed against a group of persons designated by collective description alone was early held at common law to enable a member of the group to maintain a suit. Foxcroft v. Lacy, Hobart 89a (1613); Hughes v. Winter, 2 Barn.K.B. 267 (1733). But a contrary doctrine, that absent specification of a particular person no cause of action would lie, was early established in New York, Sumner v. Buel, 1815, 12 Johns. 475, and has been followed elsewhere. Comes v. Cruce, 85 Ark. 79, 107 S.W. 185; Watson v. Detroit Journal Co., 143 Mich. 430, 107 N.W. 81, 5 L.R.A.,N.S., 480; note 34 Col.L.Rev. 1322(1934). This doctrine, not expressly repudiated, has been qualified and distinguished, but the extent to which it is accepted depends largely upon the jurisdiction. Thus, for example, a complaint was dismissed in one jurisdiction when the libellous article referred to a 'number of persons * * * including part-time doctors' at a named institution as having a contagious disease, and the plaintiff was one of four part-time doctors at such institution. Kassowitz v. Sentinel Co., 226 Wis. 468, 277 N.W. 177. Yet, in another jurisdiction, a demurrer to a complaint was overruled where the libellous article charged that graft pervaded 'the entire office' of the coroner of a named borough, but that 'most of the graft goes, not to the underlings, but to those higher up' and plaintiff was one of four physicians in the coroner's office. Weston v. Commercial Advertiser Assn'n, 184 N.Y. 479, 77 N.E. 660. Assuming the sufficiency of a complaint involving general derogatory reference to a group depends upon the intensity of the suspicion cast upon the individual plaintiff, the extent of the shadow cast is measured differently depending upon jurisdiction.

Since jurisdiction in this case rests upon diverse citizenship, this Court ordinarily would resolve the problem of choice of law in accordance with the conflict-of-law principles of the State in which it sits. Erie Ry. Co. v. Tompkins, 304 U.S. 64, 58 S. Ct. 817, 82 L. Ed. 1188; Klaxon Co. v. Stentor Electric Mfg. Co., 313 U.S. 487, 61 S. Ct. 1020, 85 L. Ed. 1477. New York courts have applied the Restatement choice of law rule for torts generally and accordingly have selected as governing law that of 'the state where the last event necessary to make an actor liable' took place. Restatement, Conflict of Laws, Sec. 377 (1934); cases collected in Mattox v. News Syndicate Co., 2 Cir., 176 F.2d 897, footnote 1 at page 900, 12 A.L.R.2d 988. But as to libel communicated in several jurisdictions, while the Restatement, Conflict of Laws, Sec. 377(5) suggests 'the place of communication' as supplying governing law, the New York decisions have not authoritatively indicated which state is the place of communication. This court has already selected New York as the state providing governing law in a multi-state publication situation on the basis of a grouping of dominant contacts, where New York was the state of the forum as well as the state of origination of the publication and the one of its principal circulation, and probably also the state of initial publication and one where the corporate plaintiff was doing business, although technically domiciled elsewhere. Dale System v. General Tele-Radio, Inc., D.C., 105 F.Supp. 745. In the instant case, there is no allegation in the complaint concerning the point of origination or state of first publication of the book in question. In addition, all of the named individual plaintiffs are alleged to be citizens of Texas, and are not presumably persons of national prominance who might suffer damage elsewhere. There is authority that the measure of damage, aside from the question of liability, in multi-state libel may lawfully be determined according to the internal law of the state of domicil of the individual plaintiff. Mattox v. News Syndicate Co., supra, 176 F.2d 897. But we do not deem it necessary, because other considerations are controlling, to select as governing law the internal rule of a single related jurisdiction on the controversial question of identifiable imputation to plaintiffs presented by their complaint.

These other considerations are not affected by variations in internal law of related jurisdictions, so far as we can determine, and so may be disposed of without first surmounting the hurdle of choice of law. One such consideration is the conspicuous omission from the complaint of the usual language of pleading which would place the individual plaintiffs in the libelled group at the time the cause of action is alleged to have arisen. The complaint was filed on April 14, 1952. The cause of action is alleged to have arisen when the book in question 'was offered for sale * * * commencing on or about March 4, 1952.' The language describing each group of plaintiffs is the same. After naming them, the complaint states 'each of whom is a model employed by Neiman-Marcus' and 'each of whom is a salesman' and 'each of whom is a saleswoman.' Absent are any phrases suggesting that any of the plaintiffs were members of the group at the time the cause of action is alleged to have arisen. Between March 4 and April 14, it is far short of speculation to assert that a department store, alleged to employ 'more than 1200 people', hired nine models, fifteen salesmen and thirty saleswomen. If such was the case, and if persons employed subsequent to the date on which this cause of action is alleged to have arisen, are the individual plaintiffs in this action, then these classes of plaintiffs might well be so elastically ill-defined, that they could not maintain this action. 'The books are full of cases illustrating the principle upon which the pleader has gone in framing the count: such as, 'The parson of Dale is a thief', where it was holden that he who was parson at the time the ...

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